Franchise CEO has message for banks in wake of investor crackdown

by Julia Corderoy31 Jul 2015
The chief executive of Mortgage Choice has a message for lenders before they take such a blunt approach and increase interest rates on investment lending.

New data from Mortgage Choice’s Investor Survey found that 54% of potential investors said that they would still like to go ahead with their investment plans, despite restrictions making it harder to do so. However, Mortgage Choice CEO, John Flavell says the data tells a very different story when looking at the responses from potential Gen Y investors. 

“Just 45% of those born between 1980 and now said the investment changes wouldn’t affect their property plans, meaning most would be affected by the changes,” he said.
 
“Baby boomers by comparison, were far less likely to be put off by the changes, with just 30% saying any changes would affect their property investment plans.”

According to Flavell, this means that it is those who would benefit from investing the most who will be hit the hardest.
 
“Our data shows an increasing number of investors are actually Gen Y’s who are purchasing property for the first time. For many younger buyers, purchasing an investment property before an owner occupied property gives them the opportunity to purchase where they can afford while still living where they want.
 
“We should be encouraging these people to buy property, not hindering them at every turn. Unfortunately, the changes many of the lenders are making are putting these buyers off.”

As such, Flavell has a message for lenders before they take such a blunt approach and increase interest rates.
 
“If lenders are going to continue to make substantial changes to their investment lending policy and pricing, they need to consider who they are trying to impact. If the goal is to stop first home buyers and mums and dads from purchasing investment properties, then mission accomplished.
 
“If lenders are just trying to curb their overall level of investment activity, then perhaps they should consider pulling other levers that will impact cashed-up investors and foreign investors.”
 

COMMENTS

  • by Brissie Broker 31/07/2015 8:52:09 AM

    Here Here Mr Flavell in the famous words of an ex-politician & unusual dancer..... the rich get richer & poor get the picture... those with lots of equity will be the only ones delving into the investment property market.

  • by Sophie 31/07/2015 9:02:52 AM

    Joint effort by the banks to show APRA who's boss?

  • by Wa broker 31/07/2015 9:03:06 AM

    I agree with John's sentiments. But maybe could the increase in pricing be part of the bigger picture with banks requiring greater capital reserves and liquidity?